Recent Commitment of Traders Reports Overview
Market Positioning Insights from the COT Report – Tuesday, December 3, 2024:
- Asset managers have decreased their net-long positioning on the USD index for the first time in nine weeks.
- The Yen futures saw a shift to net-long positions among large speculators, marking the first week in seven, with asset managers likely to follow suit soon.
- Net-short positions on EUR/USD futures have climbed to the highest level in 4.5 years, although the increase amounts to only 1.5k contracts.
- Large speculators cut their net-long positions in AUD/USD futures by 10.4k contracts, while asset managers expanded their net-short holdings by 8.4k contracts.
- Investors are the least bearish on GBP/USD futures in the past 28 weeks.
- For a second consecutive week, asset managers held net-short positions in VIX futures.
- Large speculators and asset managers both increased their net-long positions in gold futures, by 9.4k and 1.5k contracts, respectively.
- Net-long positions in silver and copper futures have increased slightly, climbing by 514 and 477 contracts, respectively.
US Dollar Positioning Insights (IMM Data) – COT Report:
Recent data indicate subtle but potentially significant signals regarding USD's upcoming volatility. Asset managers have reduced their net-long exposure for the first time in nine weeks, and overall trader sentiment toward the USD has become less bullish for the first time in ten weeks.
This observation isn't a definitive bearish signal for the USD; rather, it suggests a possible change in momentum from the previous strong run above 100. While there's potential for a stronger USD in the first half of 2025, we might need to see a pause in the current trend or even a slight pullback before resuming upward movement. The recent decline in long positioning among traders marks a crucial first step in this process.
JPY/USD Positioning Insights (Japanese Yen Futures) – COT Report:
In a notable shift, large speculators have transitioned to a net-long position in Yen futures for the first time in six weeks. This change follows previous market trends and positioning adjustments observed over the last two weeks, with traders increasing their long bets and reducing short positions over the past month.
Although the current bullish exposure stands at a modest 2.4k contracts, the rising likelihood of a Bank of Japan rate hike and the slight net-short positioning of asset managers (5.8k contracts) suggest we could see a strengthening yen as we approach the new year, especially amid potential turbulence during Trump's second term.
AUD/USD Positioning Insights (Australian Dollar Futures) – COT Report:
Futures traders exhibited a bearish shift towards AUD/USD, decreasing positions by approximately 19k contracts last week. Large speculators cut their net-long exposure by 10.4k contracts, while asset managers added 8.4k contracts to their net-short positions. This adjustment stemmed from a combination of increased short positions and reduced long holdings.
As prices approach 2022's trend support, a break below this level appears more likely, given the growing odds of Reserve Bank of Australia rate cuts, alongside strong US economic data and the underperformance of the Chinese yuan.
